Credit Union Consolidations Surge in the Third Quarter

The NCUA approved 58 mergers in the third quarter, according to the federal agency’s Q3 Merger Activity and Insurance Report released Monday. This quarter’s number of mergers approved was considerably higher when compared to the 43 consolidations during 2021’s third quarter and 34 during the same quarter in 2020.

In the first three quarters of 2022, 134 consolidations have been approved by the federal agency, compared to 117 last year and 93 in 2020.

In addition to the 47 credit unions that received the NCUA’s nod to consolidate for expanded services, 11 credit unions got the green light to merge because of their inability to obtain officials (four), poor financial condition (three), lack of growth (two), poor management (one) and lack of sponsor support (one).

The largest credit union mergers were:

• The $1 billion Vermont State Employees Credit Union in Montpelier with the $1.9 billion New England Federal Credit Union in Williston (expanded services).
• The $264 million Parsons Federal Credit Union in Pasadena, Calif., into the $1.1 billion Skyla Federal Credit Union in Charlotte, N.C. (expanded services).
• The $209 million Emory Alliance Credit Union in Decatur, Ga., with the $1.3 billion Credit Union 1 in Rantoul, Ill. (lack of growth).
• The $148 million Bear Paw Credit Union in Havre, Mont., with the $411 million Altana Federal Credit Union in Billings, Mont. (expanded services).

Additional credit unions with more than $100 million in assets that got approval to consolidate for expanded services included:

• The $127 million Calcite Credit Union in Rogers City, Mich., with the $670 million Alpena-Alcona Area Credit Union in Alpena, Mich.
• The $117 million Tri Boro Federal Credit Union in Munhall, Pa., into the $149 million Omega Credit Union in Wexford, Pa.
• The $104 million Community Alliance Credit Union in Livonia, Mich., with the $354 million People Driven Credit Union in Southfield, Mich.
• The $103 million Hayward Community Credit Union in Hayward, Wis., into the $663 million Superior Choice Credit Union in Superior, Wis.

There were 40 credit unions with less than $100 million or less than $50 million in assets that were approved to merge for expanded services.

Credit unions that got the green light to merge because of poor financial condition were:

• The $132 million California Bear Federal Credit Union in Los Angeles into the $2.3 billion Credit Union of Southern California in Whittier, Calif. According to NCUA financial performance reports, California Bear posted a $1.8 million net loss at the end of 2020 and a net gain of $122,177 by December 2021. In the first, second and third quarters of this year, California Bear recorded net losses of $90,824, $142,487 and $663,740, respectively.
• The $7.6 million Bayer Credit Union in Kansas City, Mo., with the $4.5 billion Community America Credit Union in Lenexa, Kan. (Bayer recorded a net loss of $218,131 at the end of the third quarter, and additional losses of $41,332 and $42,887 at the end of the first and second quarters of this year respectively, NCUA financial performance reports showed).
• The $80,056 Shiloh Baptist Federal Credit Union in Waukegan, Ill., with the $259,104 Gideon Federal Credit Union, also in Waukegan.

Credit unions approved to consolidate because of their inability to obtain officials included:

• The $34.7 million Potomac Federal Credit Union in Cumberland, Md., with the $329 million WEPCO Federal Credit Union in Bloomington, Md.
• The $23.7 million Hub-Co Credit Union in Keokuk, Iowa into the $162 million AIM Credit Union in Dubuque, Iowa.
• The $5 million Warren Credit Union in Waterloo, Iowa, with the $6.7 billion Veridian Credit Union, also based in Waterloo.
• The $123,762 Norwesco Credit Union in St. Francis, Kan., into the $916 million Golden Plains Credit Union in Garden City, Kan.

In addition to the Emory Alliance Credit Union, a second credit union that received approval to merge because of lack of growth included:

• The $1.5 million KAH Credit Union in Keokuk, Iowa, into the $162 million AIM Credit Union in Dubuque, Iowa.

One credit union that got the OK to consolidate because of poor management was:

• The $2.3 million N.G. Northern Federal Credit Union in Vandergrift, Pa., with the $149 million Omega Federal Credit Union in Wexford, Pa.

One credit union that received approval to merge because of lack of sponsor support was:

• The $2.9 million Armstrong Federal Credit Union in Byram, Miss., with the $112 million Jackson Area Federal Credit Union in Jackson, Miss.